COMMISSIONER OF INCOME TAX Vs. I CHATTERJI

JUDGEMENT

(1.) AT the instance of the Revenue, this reference is made under S. 256(1) of the IT Act, 1961, to pose the question :

(2.) THE assessment year involved is 1969 70. The assessee is the owner of a house property at Koregaon Park, Poona. He was occupying it himself. The ITO computed the income from this self occupied house property at Rs. 8,090, as against Rs. 5,663 returned by the assessee. In doing so, the ITO did not allow deduction for municipal taxes in the sum of Rs. 3,032, in view of S. 23 of the IT Act, 1961. The AAC allowed the assessee's appeal. The Revenue went up before the Tribunal which, upon a construction of S. 23, held that the deduction on account of municipal taxes ought to have been allowed. The correctness of the Tribunal's conclusion is in question before us.

(3.) IT is a settled position, in view of the judgment of a Full Bench of this Court in New Piecegoods Bazar Co. Ltd. vs. CIT (1947) 15 ITR 319 (Bom) : TC40R.528, that, in arriving at the annual value of property, being the sum for which the property might reasonably be expected to let from year to year, for the purposes of income tax, local or municipal taxes cannot be deducted.